Correlation Between Callon Petroleum and Civitas Resources
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and Civitas Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Callon Petroleum and Civitas Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and Civitas Resources, you can compare the effects of market volatilities on Callon Petroleum and Civitas Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Callon Petroleum with a short position of Civitas Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and Civitas Resources.
Diversification Opportunities for Callon Petroleum and Civitas Resources
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Callon and Civitas is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and Civitas Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civitas Resources and Callon Petroleum is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Callon Petroleum are associated (or correlated) with Civitas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civitas Resources has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and Civitas Resources go up and down completely randomly.
Pair Corralation between Callon Petroleum and Civitas Resources
If you would invest 4,926 in Civitas Resources on August 28, 2024 and sell it today you would earn a total of 266.00 from holding Civitas Resources or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Callon Petroleum vs. Civitas Resources
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Civitas Resources |
Callon Petroleum and Civitas Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and Civitas Resources
The main advantage of trading using opposite Callon Petroleum and Civitas Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, Civitas Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Civitas Resources will offset losses from the drop in Civitas Resources' long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| Civitas Resources vs. Magnolia Oil Gas | Civitas Resources vs. SM Energy Co | Civitas Resources vs. Range Resources Corp | Civitas Resources vs. Matador Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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